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Canada's Trade Deficit Widens on Surprise Export Decline

(Bloomberg) -- Canada’s exporters suffered an unexpected setback in May amid weakness in the auto industry.

Exports fell 0.1 percent during the month, the first decline since January, Statistics Canada reported Friday from Ottawa. Were it not for price increases, the decline would have been sharper, with volumes down 1 percent in May.

The export drop drove the trade deficit to a wider than expected C$2.8 billion, and will be seen as a disappointing result for a sector that had been showing signs of strength. After struggling through the middle part of last year, exports had seen a revival in recent months due to a run-up in oil prices and stronger demand for non-energy exports.

Imports rose 1.7 percent in May, after falling a month earlier. Economists surveyed by Bloomberg News had anticipated the trade deficit would widen to C$2.2 billion, from C$1.9 billion in April.

Other Trade Highlights

In real terms, imports were up 1.2 percent

Shipments of aircraft and energy products contributed the most to the increase in May, Statistics Canada said

Imports of refined gasoline also shot up due to temporary refinery shutdowns in Canada

The auto sector was the leading driver of the export decline, with car exports down 3.6 percent. Statistics Canada cited in part a disruption in the supply of auto parts for the fall Auto sales are down 15 percent over the first five months of 2018, compared with the same period in 2017

Exports of metal ores and minerals also posted a sharp decline -- 15 percent -- due to work stoppages